CEO Q&A with Keith Hovan, Southcoast Health System and Southcoast Hospitals Group

As health care reform in Massachusetts looks to change the way the industry operates, SouthCoast Business Bulletin correspondent William Moniz sat down with Keith Hovan, president and CEO at Southcoast Health System and Southcoast Hospitals Group, to discuss the changing health care landscape.

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Posted Oct. 19, 2012 at 1:12 PM
Updated Oct 19, 2012 at 3:17 PM

Posted Oct. 19, 2012 at 1:12 PM
Updated Oct 19, 2012 at 3:17 PM

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As health care reform in Massachusetts looks to change the way the industry operates, SouthCoast Business Bulletin correspondent William Moniz sat down with Keith Hovan, president and CEO at Southcoast Health System and Southcoast Hospitals Group, to discuss the changing health care landscape.

Q: Healthcare reform in Massachusetts seems to be moving away from the fee for service approach to the more preventative payment approach. How do these changes affect Southcoast's delivery of healthcare locally?

A: Health care organizations in general are shifting away from volume and toward more focused patient services and incentives to providers that accompany affordable change. There are three metrics that are important to us at Southcoast. The first one is access. Whether seeking preventive or curative treatment, patients have to be able to conveniently access the system. Second, quality of care and safety of care are paramount while at the same time trying to deliver these services at a low unit cost. And third, there are experiential considerations; we want the patients to be able to say that they've been treated right, with courtesy and respect.

Q: You've mentioned using epidemiological methods to measure illness predictability in the SouthCoast population. How is this information put to use and how does using it help lower healthcare costs?

A: We use the data to guide our program development. It helps us determine how to best deploy resources in the most cost effective manner. For example, if the data says that more patients are going to need a certain type of intervention or preventative care, we can focus our resources in that specific area. If we get to the patient early enough with the proper preventive care, we can help to stop the incident from happening — which in turn reduces that patient's health care costs over the course of their lifetime.

Q: You mentioned a study recently released by The Center for Policy Analysis at the University of Massachusetts Dartmouth depicting Southcoast Health System's economic contribution to the regional economy. How many employees does Southcoast have?

A: We currently have 7,000 employees, but our economic impact extends well beyond just direct employment. Besides hiring locally whenever possible, we also buy from local vendors and use local contractors both union and non-union. The UMASS study showed that we contribute approximately $1.5 billion annually to the area economy. Our foundational priority is providing high quality, safe patient care, but in doing that we are always trying to partner with and support local businesses.

Q: A big operation. How do you keep a handle on in-house costs?

A: Some time ago, we identified our up-and-comers and trained them in Lean and advanced Six Sigma principles. We now have several Master Black Belt, and Black Belt team leaders certified in this quality management process. It's made a difference. Just one example; The process helped us identify a couple of steps in our hospital admitting procedure that turned out to be unnecessary. We've since eliminated them and streamlined the procedure. Overall it's resulted in the elimination of about 30% of non-value added waste from the system. Over the past four years we've achieved between $30 to $32 million in operating cost savings.

Q: What other Southcoast initiatives should we know about?

A: Heart lung disease is a big problem and we're proud of what we're doing in our congenital heart failure clinic. As far as costs are concerned, the hospital is the 600 lb. gorilla in the system so the goal is to keep these patients ambulatory and out of the hospital. Our physicians see these patients at the clinic at regular intervals. Then our nurses follow-up with phone calls to monitor their metrics to ensure they're following treatment plans. Although we lose money on the clinic itself, we're reducing overall system costs by limiting the number of patients who might otherwise be admitted.

Q: Southcoast has been adding physicians lately, why the current focus on hiring?

A: The main reason for the hiring is that our primary care physicians need more of the best specialists, in a variety of medical disciplines, working together with them to keep patients healthy. Also, most medical school graduates these days aren't interested in hanging up a shingle and starting their own practice from scratch. They'd rather join a network where they have access to the newest technologies and support from colleagues for consultation and call coverage.

Q: SouthCoast already has a substantial footprint in southeastern Massachusetts. Do you foresee further physical expansion either out of state or to other parts of Massachusetts?

A: As you know, we already have a presence in nearby Rhode Island, but our trustees all live here in the area so our primary focus is on the SouthCoast. Nevertheless, although we have no current plans, we will never not consider an opportunity for expansion. Everything is considered. For instance we have partnerships with both Tufts and Massachusetts General Hospitals in Boston. Earlier this year we entered into a collaborative arrangement with Boston Children's Hospital. Here at St. Luke's, partnering with BCH, we've constructed an emergency room dedicated exclusively to treating children. Boston Children's pediatricians will provide 24/7 onsite pediatric care working with local physicians in pediatrics, family medicine and emergency medicine. There's an office and sleep room nearby; there's always somebody here for whatever a child might need. It's a central location, approximately midway between Tobey in Wareham and Charlton in Fall River; it's convenient to the entire system. Only in extreme situations requiring specialization will children have to be transported to Boston or to Hasbro in Providence.